WASHINGTON (Reuters) - Ballooning construction costs that
nearly doubled the price tag for building the world's cleanest
coal-burning power plant to $1.8 billion prompted the U.S.
Energy Department on Wednesday to pull the plug on funding the
project.

A consortium of utility and coal companies in December
picked a site in Mattoon, Illinois, to build the so-called
FutureGen plant, which would burn coal and sock away
heat-trapping carbon dioxide emissions underground.

However, the Energy Department, which would bear about 75
percent of the plant's costs, balked at cost overruns for the
project - originally expected to come in near $900 million.

Instead, the Energy Department said it will fund "multiple"
projects with the aim of getting commercial-scale integrated
gasification combined cycle coal plants operating by 2015.

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The department said two sites in Texas and two in Illinois
-- including the Mattoon site -- could be eligible to host the
projects.

The 13-member FutureGen Alliance includes U.S. utilities
and coal producers such as American Electric Power Co and
Peabody Energy along with international miners Anglo American,
BHP Billiton and China's largest coal-based power company,
China Huaneng Group.